A possible £15 million contract is unlikely to save a Tyne shipyard from having to make a number of redundancies.

A possible &#xA3;15 million contract is unlikely to save a Tyne shipyard from having to make a number of redundancies.

Staff at ship repair and conversion experts, A&P Tyne, have been told difficult trading conditions have forced it to look at restructuring in the summer and autumn.

Ten days ago, Phil Stringer, projects director of A&P, said the deal could even create 100 more jobs, saying: "If this contract is secured, and we are very close to signing, we will be looking to safeguard the 250 jobs of our core workforce and create a further 100 positions." But in a letter to the workforce, managing director Fred Newman said the job losses, which could run into double figures, have come despite the company making good progress.

Earlier this month A&P, with yards in Wallsend and Hebburn, said it is close to agreeing a major contract to refit a large vessel.

A series of large contracts, including the &#xA3;10 million conversion of the Gariep diamond mining vessel, have helped the firm boost turnover from &#xA3;21 million in 2001 to &#xA3;38 million last year.

But Mr Newman said the company's financial performance has been poor because of strong competition from all areas of the market.

The job cuts are likely to affect management and staff positions as the firm looks to undertake a full review of its workforce.

An A&P spokesman said while the job losses are not expected to run deep, it is hard to predict the shipping industry which traditionally swings between good and lean months. A spokesman for the GMB, which represents staff at A&P, said it will meet management to discuss the cuts.